POLITICS: Study: US Overestimated Chinese Military Spending by Two-Thirds

A study released by the RAND corporation, one of America's premier think tanks, indicates that the DoD's estimate of China's annual military
expenditure may have been overestimated by as much as two thirds.

news.yahoo.com
The RAND Corporation, a research group that studies many issues for the Pentagon, estimated China's military spending totaled $31 billion to $38
billion in 2003, which it said was the most recent year for which full data was available.

By contrast, the Defense Department has put the 2003 figure as high as $65 billion, 71 percent greater than the high end of RAND's estimate.

The communist state itself has used a figure of about $25 billion, but U.S. experts say that does not include research and development, pensions and
some other costs normally included by western militaries.

RAND's figure could raise questions about some of the arguments used by U.S. decisonmakers to justify continued spending on big-ticket weapons
systems.

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I can't help but be reminded by the furore that occured when it was found the CIA grossly over-estimated the USSR's military funding during the
1980's. There are undoubtedly questions of methodology that can be asked, but as it's happened before, I think this lends support to a theory of
intentional exaggeration, or at least wilfull blindness. What does everyone think on this matter?

It wouldn't surprise me at all. China is the new cold war enemy for the military-industrial complex. Lockheed-Martin probably throws a staff party on
every anniversary of the ChiCom's take over of China.

I'm curious how they arrive at these - to use their own word - "estimations". China is notoriously protective of any and all internal workings.
Regardless, you can be guaranteed that the Pentagon is going to make inflated estimations, while China is going to under-report them. In light of
this, RAND is probably nearest the mark.

Speaking of the future though, RAND also forecasts that China's military spending will double over the next 20 years.

* The growth rate of China’s large economy is unlikely to match that of the past 30 years. However, researchers assume that the economy will
grow at an average annual rate of 5 percent through 2025. It will more than triple in size to be about half the projected size of the U.S. economy.
* As China’s population becomes older and more urbanized, the government will face strong pressure to spend more on needed social programs such
as pensions and health care and on public infrastructure. These demands will limit the resources China has available for military spending.
* China’s defense industry is still technologically backward but is improving rapidly. Reforms such as open bidding for materials have been
introduced to encourage innovation and efficiency. These trends will continue if the Chinese government continues to push reforms and increase defense
spending.

These factors suggest that China will have the economic and technological wherewithal to increase its military capabilities substantially in the next
two decades. PAF’s projection of the most likely level of future military spending through 2025 puts China’s military spending at the equivalent
of $185 billion (in 2001 dollars) in 2025, roughly three-fifths of U.S. defense spending in 2003. Between 2003 and 2025, in dollar terms Chinese
expenditures on procurement and research and development are projected to more than double.[/url]

While China may not be spending as much as the U.S., they are probably using the money more wisely and injecting it onto programs and equipment that
will have real benefits. The U.S. military is notorious for pissing funds against the wall through money-pits like the NMD and through preferential
contract allocation with dubious motives.

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